Petroleum prices are poised to rise significantly in the upcoming weeks, marking a reversal from recent decreases that brought relief to consumers. The government is considering raising prices of high-speed diesel (HSD) and petrol by Rs9.84 and Rs7.54 per liter respectively, effective from July 1. These potential increases are driven by fluctuations in global oil prices, prompting the government to also contemplate raising the petroleum levy on these fuels. A proposed hike of Rs5 in the petroleum levy could push petrol prices up by Rs12.54 per liter and HSD by Rs14.84 per liter.
Currently, the government levies Rs60 per liter on petrol and HSD, exempting them from general sales tax (GST). The imminent levy increase could exacerbate inflationary pressures, particularly affecting consumers in transportation and agriculture sectors, who heavily rely on HSD.
Oil marketing companies anticipate ex-depot prices to climb from Rs258.16 to Rs265.70 per liter for petrol and from Rs267.89 to Rs277.73 per liter for HSD, based on existing government taxes and margins.
Meanwhile, concerns are mounting as oil marketing companies have halted fuel supply in Punjab ahead of the anticipated price hikes. According to Khawaja Atif, Secretary of the Petroleum Dealers Association, no oil tanker has delivered fuel to pumps across Punjab, including the capital, for the past four days. He warned of an impending oil crisis if supply doesn’t resume promptly, potentially forcing pump closures across Lahore and Punjab.
In response, Tariq Wazir Ali, Chairman of the Oil Marketing Association, refuted allegations of deliberate supply shortages, attributing the issue to oil refineries’ failure to deliver sufficient stock. He emphasized the need for regulatory intervention to ensure uninterrupted supply of petroleum products.
